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Buying a home in this economy is no less than a herculean task. Apart from finding a house that one would like to invest their hard-earned money into, there are multiple other hurdles that a person needs to clear before becoming an owner. While renting a house is the most common trend, buyers are generally unable to raise enough funds for a large deposit to get a mortgage. The startup Unmortage, however, intends to shake up the scene with its service that enables one to buy five percent of a home and rent the rest.
Forging new partnerships
The startup Unmortgage has announced a new partnership with Allianz Global Investors (AllianzGI), which is a part of the Allianz Group. The new investors will create a new fund to supply money for buying 95 percent of the home, when a customer buys a 5 percent stake. AllianzGI is one of the world’s leading active investment managers with over €535 billion in assets.
TechCrunch reports that the fund managed by AllianzGI targets a size of €556 million. In addition, the two companies are said to have struck a deal sometime mid last year but has announced it today, which is a good way to showcase some momentum since the company’s founder and CEO Ray Rafiq-Omar bowed out from the startup last month. However, since the deal is said to have been set last year, Rafiq-Omar was the CEO when it happened.
How Unmortgage works
While the way in which unmortgage works seems complex, it is actually a sensible proposition for first-time property buyers. As mentioned earlier, a person buying a house with the startup can start by owning with a minimum of five percent of the house they choose. However, the buyer needs to have a household income of €33,436 and the five percent they pay needs will be at least €13,902. The remaining 95 percent of the house is bought by one of Unmortgage’s funding partners.
The rent is decided by the average prices of houses in the locality and deducting their initial deposit. For example, if one buys a 5 percent ownership in a house which has the rent set at €1,000, the buyer would need to pay 95 percent of the amount, which is equal to €950 in this case. One can also buy more of the house whenever they want and every year, they can buy up to 5 percent of their home.
Stay tuned to Silicon Canals for more updates in the tech startup world.
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